Imperial eyes B.C. gas fields

CALGARY — Imperial Oil Ltd. is considering joining a growing number of companies planning liquefied natural gas plants on the West Coast as a way to boost returns on vast reserves of natural gas in B.C. and Alberta, its CEO said Wednesday.

Bruce March said after the company’s annual meeting that planning for such a development is still in the “very early days” but that a plant could take gas from the Horn River shale-gas field it is developing along with its majority owner, Exxon Mobil Corp., as well as other fields, and send it to high-paying Asian markets.

“The good thing we look at, in terms of LNG from Western Canada, is there appears to be huge and substantial growth opportunities for gas demands in Asia,” March said.

Northeastern B.C. contains massive reserves of natural gas trapped in shale, with fields like the Horn River and the Montney containing hundreds of trillions of cubic feet of the fuel.

But western Canadian producers are being pushed out of their traditional American markets by low-cost U.S. shale-gas supplies. That has prompted a number of companies to look for overseas buyers for the fuel.

Canadian regulators have already awarded LNG export licences to two proposed LNG producers — Kitimat LNG, owned by gas-producers Apache Corp.; Encana Corp. and EOG Resources Inc., and BC LNG, backed by a co-operative of gas producers as well as B.C.’S Haisla First Nation.

March said that building an LNG facility would require intensive drilling on its Horn River lands to feed the plant. That could be a disadvantage, given that other LNG producers in Qatar, Australia and elsewhere can tap big reserves with fewer wells than shale-gas developments require.

March also said gas reserves in Canada’s far north may be suitable for LNG development with economics for the long-delayed Mackenzie Valley gas pipeline to southern markets in question.